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Passive Income vs. Residual Income

Often we come across terms in regards to doing business online that we are not 100% familiar with. Sometimes even several terms that are mistakenly interchanged to the point that the true meaning of each gets lost altogether.
According to a recent survey, two such terms are "passive income" and "residual income". Both are often associated with Network Marketing opportunities... but today we're going to explore their true meaning, as well as other online opportunities to earn one or both types of income. 

Residual Income
Recurring payments that you receive long after the initial sale is made, usually in specific amounts and at regular intervals.

Passive Income
"Income derived from business investments in which the individual is not actively involved"
Passive basically means "inactive" or "submissive", so Passive Income could be viewed as money that you make that doesn't require an effort from you.

Examples of residual income options might include:
  • Network Marketing, where you enroll customers or recruit representatives that you earn a monthly commission from.
     
  • Affiliate programs for recurring payment type services or products, such as: hosting, membership sites, dating sites, etc. In these programs, you are paid a commission each time the recurring payment is billed to the customer you referred.
     
  • Selling anything that is automatically renewable, or consumables where the re-ordering is automated.

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